Direct financing for communities and businesses to respond to Project/Programme Title: climate change in the Cook Islands Country(ies): Cook Islands National Designated Wayne King, Director, Climate Change Cook Islands, Office of the Authority(ies) (NDA): Prime Minister, Cook Islands Ministry of Finance and Economic Management (MFEM), Cook Accredited Entity(ies) (AE): Islands Date of first submission/ 2020-10-12 V.1 version number: Date of current submission/ [YYYY-MM-DD] [V.0] version number Please submit the completed form to [email protected], using the following name convention in the subject line and file name: “CN-[Accredited Entity or Country]-YYYYMMDD” PROJECT / PROGRAMME CONCEPT NOTE Template V.2.2 Notes The maximum number of pages should not exceed 12 pages, excluding annexes. Proposals exceeding the prescribed length will not be assessed within the indicative service standard time of 30 days. As per the Information Disclosure Policy, the concept note, and additional documents provided to the Secretariat can be disclosed unless marked by the Accredited Entity(ies) (or NDAs) as confidential. The relevant National Designated Authority(ies) will be informed by the Secretariat of the concept note upon receipt. NDA can also submit the concept note directly with or without an identified accredited entity at this stage. In this case, they can leave blank the section related to the accredited entity. The Secretariat will inform the accredited entity(ies) nominated by the NDA, if any. Accredited Entities and/or NDAs are encouraged to submit a Concept Note before making a request for project preparation support from the Project Preparation Facility (PPF). Further information on GCF concept note preparation can be found on GCF website Funding Projects Fine Print. PROJECT / PROGRAMME CONCEPT NOTE GREEN CLIMATE FUND | PAGE 1 OF 4 A. Project/Programme Summary (max. 1 page) ☒ Project A.2. Public or ☒ Public sector A.1. Project or programme ☐ Programme private sector ☐ Private sector Yes ☒ No ☐ A.3. Is the CN submitted in ☐ Confidential If yes, specify the RFP: Enhancing A.4. Confidentiality response to an RFP? ☒ Not confidential Direct Access (EDA) Mitigation: Reduced emissions from: ☐ Energy access and power generation ☐ Low emission transport ☒ Buildings, cities and industries and appliances A.5. Indicate the result ☐ Forestry and land use areas for the Adaptation: Increased resilience of: project/programme ☒ Most vulnerable people and communities ☒ Health and well-being, and food and water security ☒ Infrastructure and built environment ☒ Ecosystem and ecosystem services A.7. Estimated 71% of the Cook A.6. Estimated mitigation adaptation impact 32,118 tCO2e (estimated for Islands population, impact (tCO2eq over (number of direct residential energy efficiency only) totalling 10,600 people lifespan) beneficiaries and % of (50% women) population) A.8. Indicative total project A.9. Indicative GCF USD 26 million USD 19.3 million cost (GCF + co-finance) funding requested A.10. Mark the type of ☒ Grant ☐ Reimbursable grant ☐ Guarantees ☐ Equity financial instrument requested for GCF funding ☐ Subordinated loan ☐ Senior Loan ☐ Other: specify___________________ A.12. Estimated A.11. Estimated duration 15 years (small scale 8 years1 project/ Programme of project/ programme: infrastructure) lifespan A.13. Is funding from the Yes ☐ No ☐ ☐ A or I-1 Project Preparation Other support received ☐ If so, by A.14. ESS category ☐ B or I-2 Facility requested? who: ☒ C or I-3 A.15. Is the CN aligned A.16. Has the CN been with your accreditation Yes ☒ No ☐ Yes ☒ No ☐ shared with the NDA? standard? A.18. Is the CN A.17. AMA signed (if Yes ☒ No ☐ included in the Entity Yes ☒ No ☐ submitted by AE) If no, specify the status of AMA negotiations and expected date of signing: Work Programme? The Cook Islands are expected to incur, on average, about USD 5 million per year (2% of GDP) in direct losses due to tropical cyclone activity – of which 90% are to the building sector. This project aims to strengthen vulnerable residential, small-scale commercial and community buildings, and their surrounding environments, to reduce the building sector’s risk profile and adapt to current and projected climate change. A.19. Project/Programme rationale, objectives and Responding to the GCF’s 2016 Request for Proposals to pilot enhancing direct access, approach of this project will make climate finance directly available to communities/NGOs, programme/project (max individuals (building owners), sole traders/small enterprises, and key public agencies. 100 words) The project will be driven by the new 2019 building code standard with mainstreamed resilience measures against cyclones, storm surge, floods and drought. Mitigation co- benefit activities will reduce greenhouse gas emissions through household waste separation, increased recycling, energy efficiency retrofits, and sanitation systems. 1 On-granting will be front-loaded in the first 5 years, and the following years will be to finalize the implementation of all sub-activities, monitoring, evaluating and sharing lessons learned. PROJECT / PROGRAMME CONCEPT NOTE GREEN CLIMATE FUND | PAGE 2 OF 4 B. Project/Programme Information (max. 8 pages) B.1. Context and baseline (max. 2 pages) The Cook Islands is a small island developing state composed of 15 islands (of which 12 are inhabited), spread across 1.8 million km2 of territorial waters, known as the Exclusive Economic Zone (EEZ). Three quarters of the Cook Islands’ 18,000 population (residents and visitors) live on Rarotonga, and 11% live on the second most inhabited island, Aitutaki (2016 census). The remaining population (approximately 3,000 people) inhabit the low-lying outer islands or Pa Enua. Local and customary laws form a system of representation known as the House of Ariki (Paramount chiefs) and the Koutu Nui (Sub Chiefs supporting the House of Ariki). The economy of the Cook Islands is small, narrowly based, and sensitive to internal losses and external forces. Tourism drives about 65% of GDP, contributing significantly to other sectors, including retail trade, agriculture, and construction. After tourism, fishing, agriculture, and financial services are key sectors for the economy and livelihoods.2 Until 2020, the Cook Islands economy was experiencing strong tourism growth, with real growth reaching a high of 8.9% in 2018. However, the ongoing global Covid-19 pandemic has hit tourism-driven economies hard and the Cook Islands’ GDP is estimated to contract 9% in the last quarter of 2020 due to the collapse in tourism arrivals.3 The Government has launched a series of stimulus packages and incentives: welfare cash payments, wage subsidies, business continuity loans, fees-free training, and most recently a Green Economy Initiative with 50% accelerated depreciation for sustainable investments, to incentivize environmentally sustainable assets and support a greener economic recovery over the medium- to long-term. Climate change rationale Climate change risks, impacts, and vulnerability in the Cook Islands The Cook Islands sits at the heart of the Pacific cyclone belt. Since the 1970s, the country has experienced 36 cyclones of at least category 1. The 2004 – 2005 cyclone season was particularly devastating, with six tropical cyclones crossing through the country, of which three were category 5 – making landfall at windspeeds over 215 km/h4, damaging infrastructure and crops. Due to its exposure to severe tropical cyclones, the Cook Islands is among the 30 countries that experience the highest average annual disaster-related losses, as a share of GDP. Cyclone risks are primarily to the building sector. According to a World Bank simulation (2015), buildings account for nearly 90% of losses when considering the three key asset classes – buildings, cash crops and infrastructure (Figure 1). The Cook Islands are expected to incur, on average, about USD 5 million per year in losses due to tropical cyclones. Simulated direct cyclone losses in the Cook Islands average USD 5M per year (2% GDP, 2015)5 Figure 1. Spatial distribution of buildings (left) and average annual loss due to tropical cyclones and earthquakes across buildings, cash crops and infrastructure (right) Tourism has driven coastal construction, which has increased building exposure and removed natural protective barriers. Coastal development driven by the tourism industry seeks to offer tourists direct access to the waterfront. The build-up of assets along the coastline of the capital, Rarotonga, as illustrated Figure 1, has increased the country’s exposure to damage from tropical cyclones and storm surge. Many natural protective barriers have been removed in the process, accelerating coastal erosion and in turn further exposing buildings in a negative feedback loop. 2 ADB, 2019. Pacific Finance Sector Briefs: Cook Islands. 3 ADB, 2020. Asian Development Bank Outlook 2020. 4 Beca, 2017. Cook Islands Building Code Review - Proposed Updates. 5 World Bank, 2015. Cook Islands Country Note: Disaster Risk Financing and Insurance: https://tinyurl.com/yad2dmhj PROJECT / PROGRAMME CONCEPT NOTE GREEN CLIMATE FUND | PAGE 3 OF 4 Responding to vulnerability and critical exposure in the building sector, the Government of the Cook Islands in 2019 published a new Building Code, per the 1991 Building Code and Standards Act. The following adaptation measures have been mainstreamed into the requirements for all buildings in the Cook Islands: category 3 cyclone compliance for all buildings – with more stringent